EFC Question??

I just filled out my FAFSA and it sent me an email back stating that my EFC is: 06078 or $6,078 a year.

My parents make a combined total of 21,000 a year and I made 8,000 during the FAFSA asigned year. Our income went DOWN compared to our EFC that SKYROCKETED from 01755 or $1,755 last school year. Our house is worth 160,000 dollars, we have no real valuable assets… nothing fancy.

How is our EC so high that it robbed me of my Pell Grant??? I wont be able to afford school… what do I do??
Can my school see that my income is 29k and give me atleast some of the Pell Grant for the next school year?

My school costs 31k a year, but I get 18k a year in sholarships… Usually i have 22k including the pell grant and I try to pay the rest off with loans and stuff.

Read this.

https://www.edvisors.com/fafsa/eligibility/simplified-needs-test/

If your parent income is really $21,000 a year…is there any chance they were eligible to file a 1040A or 1040EZ tax form…OR did they qualify for a means tested benefit like SNAP or did anyone in the family get free/reduced lunch?

If so…you would qualify for an auto $0 EFC…and your income and assets wouldn’t count…at all…and your parent assets wouldn’t count…at all.

There are questions on the FAFSA to tease this out.

The only thign I can think of is my parents transferred 20 from an account to retirement which bumped up our income on the IRA to 50k. I reallydo not know what to do. I cant fix it because I used the IRA tool on the FAFSA … can I sumbit a completely new application???

Are you saying they did an IRA rollover of $20,000 in 2016? Is that what you mean?

Or did they just add to their IRA from a regular savings account.

Rollover would matter. There is a place to indicate this ON the FAFSA form. If it’s a rollover, and they didn’t indicate this properly on the FAFSA, it was treated as income. You can get this corrected by contacting your financial aid office.

Their contributions to a tax deferred account in 2016 would be counted as income.

What exactly did they do??

The money my dad took out of ‘an account’ was taxed, it then and the IRA knew about it. It was then transferred to another account, for costs we had in the house. So it appeared on his 2016 Taxes as income??
Can the school fix this? FAFSA is acting like I can afford my school without the pell grant, work study or the Low Income NYS Scholarship.

I think you mean the IRS…not the IRA.

I have no idea what your dad did.

He could have done any of the following:

  1. Taken money out of a tax deferred retirement account.
  2. Taken money out of a regular savings.
  3. Rolled money over from one tax deferred retirement account to another.
  4. Contributed to his tax deferred retirement account in the amount of $20,000. But on $20,000 income...that seems unlikely.

Or something.

@sybbie719 if this student is low income in NY…wouldn’t they qualify for the excelsior? Would that replace the Pell as the last payer?

This scenerio is not clear to me. To be honest…I have NO idea what happened here.

@BelknapPoint I feel like I’m asking the wrong questions…any ideas?

If he did a withdrawal from an IRA that was taxed then it is reflected on the tax return as taxable income and counted as part of the AGI.

You can still get the Excelsior scholarship if income was under $100,000

It covers tuition at NYS schools. Ask your school about it.

You might have to get a job this summer and maybe take your student loan. Can your parents help?

With the scholarships and Excelsior, can you afford your school?

It’s not at all clear what happened. OP needs to get the facts straight before any meaningful advice or suggestions can be provided.

The thing is i live in Florida and attend my NYS school as an out of stater so I cannot get the Excelsior. And a myth abot the excelsior… not everyone gets it. The State school i go to, people were rejected with incomes of 25k living in the bronx. I recieved a low income general scholarship for about $750 a semester, $5,000 in Pell Grants, and $1,400 in Work Study last year. With my new EFC I lose ALL of that. That 7k Makes a HUGE difference.

So earlier I kind of freaked out a little bit, I had no idea what was going on. Hearing I did not get the pell Grant just threw me over the edge, I was fuming. So now I have better information:

Il reexplain: My Parents + My Income = 29k … FAFSA said we made 50k because we used the IRS Tool on the FAFSA. The IRS calculated 20k from my dad taking out money from a savings account somewhere thats linked to a retirement account. That made my EFC above the limit for the Pell Grant… is there anythign I can do to show that that 20k taken from a retirement account WAS NOT income??? Will schools take into account that that 20k taken from a retirmemnt account WAS NOT income and thats all the assets we have… just moved to a savings account.

If it helps, my school is SUNY Oswego.

Also another question… even with my income at 50k, shouldn’t I get some form of Pell??

If he took money from a taxable retirement account, it doesn’t matter that it was held there in a cash account. It only matters that when he took it from the plan, it was considered taxable as income. The IRS didn’t make up that you earned 50k because you used the “IRS Tool.” Rather, it’s the reality that he withdrew taxable assets. So 21 + about 20 does equal about 41-42k. Plus your earnings, which are assessed a little differently.

In FA, and in taxes, income doesn’t just mean job wages.

Yes I know that, but can schools see that it really wasn’t earnings? Is this going to penalize me going into the next school year?

NYS has 2 tuition grants. Students whose families earn $25k are eligible for the TAP grant which covers full tuition. They aren’t getting the Excelsior tuition grant because the TAP is paid out first. NYS tuition is ~$6k. When the $6k TAP grant is applied, the tuition balance is $0 so there’s nothing for the Excelsior to pay.

What does your package look like now? If the Pell, work study, and low income grant are only $7k, where’s the other $11k in grants coming from? Did those numbers change too, or just the Pell? You should probably call your school and ask for a one time reconsideration.

@c1997fl

If your dad withdrew money from a tax deferred retirement account…that IS counted as income for FAFSA purposes…and tax purposes…UNLESS he rolled that money over into another tax deferred account.

It sounds like he took that money out and spent did NOT put it in another tax deferred account. So…your income WOULD increase by that amount.

You need to find out what he did with that money. If it’s in your savings, it’s income…and an asset.

You can go and talk to your financial aid office about this. They might be able to help. But you will need documentation of that retirement account withdrawal. If this was a one time withdrawal for a decent reason, they might consider that…so go immediately and talk to them.

Regarding kids with $25,000 incomes NOT getting excelsior. It’s a LAST payer award for tuition, so if tuition is covered by other awards like Pell and TAP, they can’t double dip and get that money again. IIRC, Excelsior is last payer meaning that if no other awards cover tuition…and it’s tuition only…the Excelsior will pay the balance. Your $25,000 a year income friends from the Bronx probably had their tuition covered by TAP, Pell or whatever.

Also…your numbers aren’t adding up for me. You are OOS for NY…and the schools don’t guarantee to meet full need for all…and certainly not for OOS students.

@sybbie719 ??

Ok, look at your parents’ 2016 tax return. What form is it (1040, 1040A)?
If it’s a 1040 form, what is listed on line 7, line 15a and 15b, and line 37?
If it’s a 1040A what is listed on line 7, line 11a and 11b, and line 21?

What is all of your aid comprised of at Oswego?

You said costs are $31,000
You have $18,000 in scholarships?
How much of the scholarships are not dependent on income?
And last year you had around $5,000 in Pell and $5,500 in loans?
Did your parents pay the rest?

Why did your dad withdraw that money from the retirement account?
If he didn’t take the money out and put it in another retirement account within 60 days (rollover), then it becomes taxable income.

And FAFSA will count it as income too.

If he withdrew the money because of an emergency, for example repairing the house after hurricane damage, then maybe the school can use professional judgement to disregard that one-time withdrawal.

But you have to reach out to the school’s FA office.

And why is that just coming out now that your income and EFC is higher? Did you just do your FAFSA now? You should do it early, especially if you are low income.

It is sort of earnings. It’s deferred earnings. It was protected earnings until your dad took it out. So now it counts are earnings.

If your dad does this each year, it will continue to affect your aid. If this is a one-time thing and you can’t afford college now, then ask your school if you can take a leave of absence for one year. Then don’t take any classes anywhere, just work and volunteer and return the following year with the aid you need.

Maybe…and I don’t really know…maybe if your dad had to pay a large penalty, the school can somehow adjust the amount.

One thing a school can do (but is not required to do) is remove the IRA income from the AGI. They will most likely put that amount into assets, rather than into income. Sometimes they might even decide to exclude it from assets (although they are not required to do so), if there is evidence that the money is no longer there & if the money was used for a purpose the aid office feels was a use that would allow them to exclude the money from assets.

Talk to the aid office about the situation.

Lrt’s take this one step at a time

Op is an OOS attending SUNY Oswego.

Op must be a NYS resident in order to be eligible for TAP and/or Excelsior

Private schools have to op in to Excelsior for NYS residents. Even then, the max you can get for Excelsior a a private school is $3000 and then the school must match the money.

No, the myth about Excelsior is that you and your low income friends from the bronx are uninformed about how Excelsior actually works. As others have mentioned, Excelsior is a last payer award that can only be used for tuition. If your friend from the Bronx with the 25k income is getting TAP and Pell, they are not getting Excelsior because their tuition is already covered by NYS and federal sources.

One of your challenges also is, that you don’t need to be counting other people’s money, because it will only be frustrating for you. You are never going to really know all the details of someone else’s financial situation.

What you have received in scholarships and Pell is 22k. Tuition for OOS students is 24k. You knew going in that you had a short fall on tuition and that you would need to pay room board, books and your day-to-day/ misc. expenses. Financially this is a real stretch for your family if they only make 29k.

Yes, the fact that your dad has a 20k rollover that adds to your family’s income does not help your cause, but if you are OOS and low income, Oswego is really not affordable.
How did you pay for school this year? Do you and your family really want to spend the next 3 years spread so financially thin or you and them taking on all of this debt?

Is transferring to a public school in your home state of Florida and getting bright futures an option?

The instate tuition at anyone of Florida’s Public Universities is of the order of $5,900/$6,500 per year. Why in the world would a low income student bypass their very low instate tuition and pay 3-times as much for OOS tuition at SUNY Oswego (a lower-tier SUNY at that)? The direct OOS cost of SUNY Oswego is $31,869, with indirect cost, this student is probably looking at closer to $35K COA per year for Oswego.

OP, what factors went into your decision to attend a public university in NYS, when more affordable options exist in Florida? Are there any Florida public universities within commuting distance from your home? Even with room and board, the lower ranked Florida public universities COA is less than $20K per year.

@twoinanddone is there a time limit on how long after high school graduation you have to utilize your Bright Futures or lose it?